Retailing has become more challenging over the last year with continually increasing running costs and squeezed margins. It’s critical to make the most out of every transaction from the value of the goods through to the amount you pay to facilitate the sale. Money transactions more often than not have hidden charges in the small print but now there is a new breed of a financial institution. These are Financial Technology companies also known as fintech, they use state of the art technology to handle transactions more quickly at a lower cost, and the rate at which they are developing makes the banks look as though they were still in the 20th Century.
Every day in the course of our daily lives we may at some point use the services of a bank be it for a cup of coffee or making a stock trade. So why in this digital age does it still take three days to transfer money, clear a cheque or settle a stock deal? In the 1987 film, Wall Street Gordon Gekko coined the phrase “Money never sleeps” but it takes just as long now to clear a cheque. Considering that the Internet was in its infancy and mobile phones a rarity, slow transactions were acceptable then but not now.
However, fast forward, today with the high-speed Internet, digital technology and seven days trading, it’s fair to say that banking technology hasn’t kept pace with its advancement. The terms risk and due diligence policies are held up as the reasons for slow adoption, not computerisation. This delay allows the bank to enjoy the “float” of retaining funds says Ian Marshall from Quora. The truth of it is that the banks’ monopoly of cash movement allows them to do this but you the customer pay for that inefficiency.
Today these financial technology companies that have been set up with the service of the small business customer at the core. Retailers that currently wait for funds from card transactions are now able to access next day settlement, improving cash flow. In the currency market for both private individuals and small businesses, there is a more reliable and speedy online system. Costs are transparent and cost-effective allowing you the user more control of your funds as well as reducing your fees. Small/medium sized companies and individuals usually get a bad deal when it comes to currency conversions, and lower overheads mean that significant savings are passed on to customers.